Obama signs $305 billion infrastructure bill

Highways and other transportation systems in the U.S. will be strengthened through a new multibillion-dollar infrastructure bill.

The five-year, $305 billion bill was signed by President Barack Obama after being approved by Congress in early December, the Associated Press reported.

The bill is designed to improve and update the aged infrastructure in the country, create jobs and provide the federal support needed for states to undertake long-term transportation projects.

"Last night, Democrats and Republicans came together to pass a transportation bill that will help us build on America's progress by growing our economy and creating more good jobs for our middle class," Obama said in a statement.

"This bill is not perfect, but it is a commonsense compromise, and an important first step in the right direction."

Improving project confidence The new long-term spending plan was seen by lawmakers as a positive step toward the rejuvenation of the Highway Trust Fund, which has in the last decade suffered from last-minute, temporary fixes, AP noted. Since the previous four-year infrastructure bill expired in 2009, there have been 36 short-term extensions to it, according to USA Today.

The signing of the new bill helps solidify funding security for state and local governments, which have typically been hesitant to undertake significant transportation projects. Safer and more efficient systems The bill authorizes $281 billion through the Highway Trust Fund and $24 billion in annual appropriations that are subject to approval, USA Today reported. It raises highway spending 15 percent and transit spending by 18 percent.

If the optional appropriations are approved, then $12 billion would be provided for mass transit, $10 billion to Amtrak and $1 billion for National Highway Traffic Safety Administration programs, according to the source. One of the main goals of the bill is to eliminate bottlenecks and raise the capacity of highways marked as major freight corridors, AP reported.

The volume of freight traffic is estimated to grow 45 percent over the next 30 years by the Transportation Department.

USA Today noted that other safety measures in the bill include putting $200 million toward commuter railroads to install automatic braking and prevent collisions, raising the maximum fine for withholding information on automotive safety defects from $35 million to $105 million and providing $21 million to the NHTSA to develop in-car alcohol sensors that would shut off the vehicles of inebriated drivers.

Funding sources Much of the funding for national transportation bills has typically come from the gas tax, which has stayed at 18.4 cents per gallon since 1993. However, revenue from the tax no longer covers federal spending needs due to greater infrastructure demands.

USA Today reported that the new bill will acquire funds from other sources to compensate: $53 billion from Federal Reserve surplus funds, $6.9 billion from lowering a Federal Reserve banks dividend, $6.2 billion from selling part of the Strategic Petroleum Reserve, $5.2 billion from fees on Customs and Border Protection and $2.4 billion gained from allowing the Internal Revenue Service to hire private tax collectors.

Industry experts and lawmakers are hoping the new bill revives state infrastructure spending and improves transportation safety across the country